Tag Archives: Fawad Razaqzada

The dollar’s laborious consolidative days seem to be numbered from both the technical and fundamental points of view. More on the technicals later, but from a fundamental perspective, this makes sense as not only do we have the latest US inflation data coming up later on today, but the much-anticipated Federal Reserve rate announcement on Wednesday is now just around the corner, too. Against a backdrop of deteriorating data, the Fed is unlikely to raise interest rates and a potentially soft reading on the Consumer Price Index (CPI) today could deliver the final nail. more…

At the moment there is lots of noise around the 200-day moving average for the EUR/USD, and this indecision is reflected in the moving average remaining fairly flat for over the past 7/8 months. But price action continues to look bearish inside what effectively is a long-term consolidation pattern. Yesterday, for example, saw the EUR/USD form a bearish pin bar/doji candlestick pattern on its daily chart as the buyers’ latest attempt to break back above the 200-day MA was rejected. Both the 21-day exponential and 50-day simple MAs are pointing lower now, though they still remain above the 200 MA for the time being. What’s more, the EUR/USD recently broke through a long-term bullish trend line, the backside of which has since turned into resistance. more…

Inflation in the Eurozone moved in the positive territory after spending no less than four straights months below zero. According to the Eurostat, the headline ‘flash’ Consumer Price Index (CPI) measure of inflation rose 0.1 per cent in June from -0.1% in May on a year-over-year basis. Core CPI was up 0.9% versus 0.8% previously. Both measures topped expectations by 0.1 percentage points. There was good news from Germany, too, as the rate fell of unemployment remained at a record low level of 6.1% after the number of unemployed fell by a larger-than-expected 6,000 in May. What’s more, German retail sales climbed 0.9% in May when a drop of 0.7% was expected, while the decline in April was revised favourably to -0.3% from -0.9%. In France however, consumer spending declined for the second consecutive month in May, this time by a larger than forecast 0.7% (vs. 0.1% expected). more…

As it became clear that the outcome of the UK referendum was going to be an exit from the EU, the pound literally got pounded as it dropped from an overnight high of 1.50 to sub 1.33 when the news was confirmed, while the FTSE tanked nearly 10% at the open. Most people were undoubtedly wrong-footed given how confident some betting companies were in pricing in the odds for remain. Naturally, the markets have rebounded sharply off their lows as you would expect. Profit-taking and dip buyers have, for now, provided some relief. Traders who have not yet expressed their views are starting to come back into the markets as key levels are re-tested, so volumes and volatility should remain high for a while yet. Given what has happened, most speculators are likely to step in and fade the rallies rather than buy the dips. more…

This week was dominated by headlines and opinion polls regarding the UK’s June 23 EU referendum, and central bank inaction as the Fed, BoJ, SNB and – needless to say – BoE, all decided to keep their policies unchanged. The pound fell, stocks tumbled and yen soared. However, Thursday’s tragic killing of Labour MP Jo Cox saw both Brexit and Leave camps suspend their campaigns. This led to speculation that the Leave camp will now lose support and the bookies cut their odds for Brexit and GBP staged a short-covering bounce accordingly. more…

Gold is on track to chalk up solid gains for a second week running. Although the dollar has bounced back in the last couple of days of this week, it had fallen sharply the week prior as contrary to the FOMC’s last meeting minutes, the Fed made it clear that a rate hike on Wednesday of next week was highly unlikely as it expressed concerns about the May US jobs report and the potential implications of Britain leaving the EU (Brexit). The probability of a July rate rise has also fallen quite sharply. more…

Following Friday’s very bad US jobs report, the EUR/USD took out a key short-term resistance level around 1.1215 before rallying hard into 1.1350-70, an area which was formerly support and resistance. There is a danger that this key area may once again turn into resistance, potentially leading to a pullback towards the broken 1.1215 level. Alternatively, a break above 1.1350/70 could see the euro extend its advance towards the 61.8% Fibonacci retracement level at just shy of 1.1420 or higher still towards the 1.1465-1.1505 area (old resistance and 78.6% retracement). more…

From a technical point of view, the European stock market rebound on Friday was a continuation of the move from late Thursday when the S&P 500 failed to sustain its break below the neckline of a Head and Shoulders pattern, which we had covered HERE on Wednesday. more…

Although the Federal Reserve is still the only major central bank looking to increase interest rates, the persistently soft US data of late means a rate rise this year is becoming less and less likely. Yet, the US dollar has managed to regain its poise today despite the release of further disappointing macro pointers from the world’s largest economy. The reaction of the dollar looks suspicious to us, especially ahead of the publication of some important data on Friday. more…

The German DAX index, pressurised by heavy falls in German bank shares, has now ‘filled’ one of its previously unfilled gaps at around 9770. This level also roughly corresponds with the 38.2% Fibonacci retracement of the upswing from this year’s low of 8700. If the DAX manages to find significant support at this relatively shallow retracement level then it would bode well for the bulls as it would strongly suggest that they rather than the bears are still in control. But for the bullish trend to have any chance of resuming soon, the index will need to break above Thursday’s high at around 9920, a level which also corresponds with the 50-day moving average and the backside of the support trend of the bullish channel. A potential break above it would therefore re-establish the bullish channel. more…